Sales expectations are now at their lowest point since the beginning of the year, yet in Scotland 55% of chartered surveyors still expect them to increase over the next three months.
In London 62% of surveyors have reported falling new buyer demand, yet in Scotland 81% more surveyors saw an increase in fresh enquiries.
Charles Haresnape, managing director, mortgages and commercial lending at Aldermore Bank, said: “Increasing uncertainty in the market and the upcoming general election may be making people more cautious about purchasing property.
“In Scotland, evidence of a ‘post-referendum bounce’ points to a possible resurgence in sales following May’s election, as current uncertainty around interest rate rises and worries about increased taxation of luxury properties could be contributing to a temporary slowing of the market.
“However there is some cause for optimism, comments from the Bank of England confirming that interest rates are unlikely to rise until at least the middle of next year will be welcome news for homebuyers and should provide some certainty for borrowers, so while the implementation of stricter lending criteria will have had an effect on current mortgage levels we are likely to see increased mortgage lending in the New Year.”
But Ray Boulger, senior technical manager at John Charcol, said: “To blame a slowdown on the general election at this stage is a bit premature.
“I think it’s more down to the Mortgage Market Review.
“Some of the actions from the Bank of England have also resulted in some lenders tightening up a bit.
“That’s resulted in people not always being able to get a mortgage from their first choice lender.”
He added: “You usually see a slowdown in august and a pick-up in September.
“We didn’t really see that this year - the volume of transactions has not picked up in autumn as it usually does.
“Lenders now have to really compete because it’s harder to do the volumes they want.”
Boulger predicts housing transactions to stand at 1.25 million this year compared to 1.07 million last year.
RICS indicated that the current weakening trend is only likely to be ‘temporary’, adding that ‘medium term expectations remain fairly positive’.
Simon Rubinsohn, RICS chief economist, said: “The flatter trend in the market is partly a reflection of potential buyers becoming a little more cautious about making a purchase as more stringent lending criteria has made it harder to access mortgage finance.
“An increasing awareness of the approaching general election also appears to be contributing to the softer market if the responses to the latest survey are anything to go by.
“It seems implausible that the dip in demand will result in very much of a decline in house prices.
“Meanwhile, demand to rent property is growing as the sales market slows and this, coupled with a drop in supply of new stock to let, is helping to underpin the rental outlook for landlords pretty much across the whole of the country.”
